A Fresh Financial Start

Each year when the New Year rolls over, we all begin to think of New Year’s resolutions and how we want to improve our lives from the previous year. We start to set goals for our future to improve certain aspects of our lives whether it is health, personal hardships, or financial difficulties. We sometimes take a step back and realize life did not take us down the path we were expecting to be on and instead of sitting back and relaxing on a beach somewhere we are stuck with piling personal debts from student loans, credit cards, home foreclosure and are now feeling the sting of bankruptcy. Making the first steps after bankruptcy can sound difficult but you can and will bounce back from it and below are some tips on how to get started.

Let Go of Your Shame and Negativity

When hearing the word “Bankruptcy” we instantly are given such a negative image of this situation. Growing up, we are taught what obligations and responsibilities we have and as adults, we pay our bills no matter the circumstance. Unfortunately, life is never that simple and the honest truth is that it is not always possible to repay all of our debts even when trying our best to do so. If thinking that bankruptcy is your only answer, you are not alone. The fastest growing group of bankruptcy filers is people older in life. A study done in May 2011 by University of Michigan Law School found that 1 in 8 adults in the U.S. which is about 13% of general population have thought about filing for bankruptcy.

Even when people know that bankruptcy is a common practice, people still can’t help but feel guilt and disappointment when filing. The best advice is to turn those negative emotions into a more purposeful thought and think of bankruptcy as a learning experience. Truly take the time and look at what you could have done differently to prevent this situation from occurring. The next step is to accept your failure and free yourself by forgiving your mistakes and start to move on.

Recovering From
Foreclosure

Studies done by AARP’s Public Policy Institute shows a record amount of homeowners above the age of 50 that went through foreclosure or at least 90 days or more overdue on house payments from 2007 through 2001. One of the biggest issues after losing your home is a good chance you have probably drained most of your savings as well. Some people may never want to own a home again and are content just renting the rest of their life but one way to bounce back from foreclosure is to start rebuilding your savings account or rainy day funds. These accounts typically have $500- $2000 saved in them. The reason of having this type of account is to help deal with emergency or unexpected expenses like a car or home repair that suddenly needs attention. Without this type of savings, you would be forced to use payment options like credit cards to pay everyday expenses that will in turn make you overuse them and hurt credit even further.

Setting Up an Emergency Fund

An Emergency fund differs from a rainy day mainly by being a
larger amount saved in a separate account. This account should accumulate
anywhere between $3,000 and $10,000 or above if can afford it. The reason for
this larger amount saved is for this fund to assist you longer term if
something should occur in a personal dilemma such as losing your job or medical
issues arise for example. An emergency fund can also help you in a financial
disaster such as a bad business investment or loaning money to a family member
that never got repaid. These funds should have enough money saved to be able to
keep you afloat for 3 to 6 months by paying all your current bills in that time
frame. Of course it will take time and energy to make a savings such as this
but is a important goal to have in mind.

Get Help From the
Professionals

Investment mistakes whether it is watching your 401(k) change drastically or you invest in a friends/ family’s business that doesn’t make it will always take a toll on your confidence. If you are uncertain and nervous on how to manage your assets, it may be best to consult with someone who specializes in this field like a financial planner. A professional can help evaluate your needs and develop a plan to guide you through your financial plan and set new goals after a setback has occurred.

Repairing your credit
after divorce

Divorce’s can be very draining on an emotional standpoint as well as financially. Once the worst part is over, you can start to move on from this set back as well. To start fresh from a financial view, you will first need to reestablish your credit in your own name. You can find where you stand credit wise by obtaining a credit report from three of the credit bureaus- Equifax, Experian and TransUnion. Secondly, it is best to get rid of any joint credit accounts with previous spouse and be sure to pay all new bills on time to sustain your credit rating. Some people may not have very much credit in their own names so it may be a good idea to look into a secured credit card. These types of cards need to be paid cash up front for the credit line. It can be somewhat surprisingly how quickly after filing bankruptcy an bank will allow regular unsecured credit cards mainly because lenders know that a user can not file for bankruptcy protection again for several years.

Bohikian Law Group
specializes in bankruptcy services including chapter 7 and 13 bankruptcy. More information can be found at https://bohikianlaw.com.